Travel insurance restricts volcano cover

Insurers will not necessarily cover travel disruptions from volcanic events, Travel Market Report reveals, as the Mount Agung eruption continues to play havoc with air travel to and from Bali.

“Volcanoes are one of the hardest things for travel insurance companies to deal with,” admits Daniel Durazo of Allianz Global Assistance.

This is because it’s hard to discern when volcanic activity becomes “a known event”. Travel insurance companies usually do not pay claims related to a volcano – especially once it has been declared “a known event”.

It is worthwhile for travel agents who are booking clients to destinations where air travel may be affected by volcanic activity to refresh their knowledge about the insurance they advise their clients to take.

This year, destinations from Sicily to Costa Rica have witnessed more volcanic activity. In the case of Bali, more than 1,000 flights have been cancelled stranding many thousands of tourists trying to head home.

Cut-off dates
Many insurance companies declared Mount Agung a “known event” back in September, when tremors began. Others made the cut-off date later, covering buyers until November 25 but no later.

With more ash and smoke possible for days, weeks or months, thousands of claims could be triggered, which are likely to be unsuccessful.

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